Impact of Energy Price Hikes on Household Budgets

Between 2020 and 2023, average energy costs for consumers doubled. Which statement best analyzes the primary mechanism through which this price shock contributed to a wider 'cost of living' crisis?

A widespread and significant increase in the cost of energy, a key input for most businesses, triggers a series of economic events. Arrange the following events in the most likely chronological order to show how this initial price shock translates into a reduction in the purchasing power of a typical worker's wages.

Analyzing the Transmission of an Energy Price Shock